Symetra Reports Fourth Quarter, Full-Year 2012 Results

Symetra Reports Fourth Quarter, Full-Year 2012 Results
Board of Directors Authorizes Stock Repurchase Program for Up to 10 Million
Shares
Fourth Quarter Summary
-- Adjusted operating income^1 was $32.9 million, or $0.24 per diluted share,
compared with $51.1 million, or $0.37 per diluted share, in fourth quarter
2011. Grow & Diversify initiatives lowered adjusted operating income per share
by $0.05.
-- Net income was $31.0 million, or $0.22 per diluted share, compared with net
income of $73.7 million, or $0.54 per diluted share, in fourth quarter 2011.
Equity gains from mark-to-market accounting were substantially lower in fourth
quarter 2012 than the same quarter in 2011.
-- Benefits operating income declined from year-ago levels due to a higher
loss ratio.
-- Deferred Annuities earnings grew on higher account values.
-- Income Annuities earnings decreased as a result of a lower interest spread.
-- Individual Life earnings were down due to lower bank-owned life insurance
(BOLI) return on assets (ROA), higher individual claims and increased
operating expenses.
Business Wire
BELLEVUE, Wash. -- February 4, 2013
Symetra Financial Corporation (NYSE:SYA) today reported fourth quarter 2012
net income of $31.0 million, or $0.22 per diluted share, compared with $73.7
million, or $0.54 per diluted share, in fourth quarter 2011. Symetra’s equity
investment portfolio generated $35.4 million less in returns than fourth
quarter 2011, reflecting lower equity market growth. For full-year 2012,
Symetra produced net income of $205.4 million, or $1.49 per diluted share, up
from $195.8 million, or $1.42 per diluted share, in 2011.
Adjusted operating income was $32.9 million, or $0.24 per diluted share, in
fourth quarter 2012, compared with $51.1 million, or $0.37 per diluted share,
in the same period a year ago. For full-year 2012, Symetra generated adjusted
operating income of $185.3 million, or $1.34 per diluted share, compared with
$190.2 million, or $1.38 per diluted share, in 2011.
Symetra posted a 6.1% return on equity (ROE) for 2012, compared with 7.2% in
2011. Operating return on average equity (ROAE)^1 for 2012 was 8.5%, compared
with 9.5% in 2011.
Summary Financial Results Three Months Ended Twelve Months Ended
(In millions, except per December 31 December 31
share data)
2012 2011* 2012 2011*
Net Income $ 31.0 $ 73.7 $ 205.4 $ 195.8
Per Diluted Share of Common $ 0.22 $ 0.54 $ 1.49 $ 1.42
Stock
Adjusted Operating Income $ 32.9 $ 51.1 $ 185.3 $ 190.2
Per Diluted Share of Common $ 0.24 $ 0.37 $ 1.34 $ 1.38
Stock
Return on Equity 6.1 % 7.2 %
Operating Return on Average 8.5 % 9.5 %
Equity
* Historical financial information has been restated to reflect retrospective
adoption of a new accounting standard for deferred policy acquisition costs on
Jan. 1, 2012.
Fourth quarter 2012 results included the following pretax items of note, which
decreased overall adjusted operating income by $2.2 million pretax, and $6.1
million after tax:
*Investment income of $10.8 million, related to investment prepayments
(primarily bond make-whole payments in the Deferred Annuities segment),
offset by related increased amortization of $2.5 million.
*Operating expense charges of $4.6 million, including expenses related to
the exploration of an acquisition opportunity that did not come to
fruition.
*Reserve increase and higher claims, resulting in a $3.8 million decline in
Benefits earnings related to the limited benefit medical business.
*Reserve increases of $2.1 million, resulting in a charge against earnings
of $1.1 million in Income Annuities, and a charge of $1.0 million in the
Individual Life segment.
*A deferred tax asset adjustment, resulting in a $4.7 million increase in
income tax expense.
“It was a challenging fourth quarter, with lower earnings in three of our four
business segments. The key drivers of our results included less favorable
claims experience in the Benefits and Individual Life segments, and higher
operating expenses from continued investments in our Grow & Diversify
initiatives as well as M&A exploration. While we maintained our risk
management discipline, expense growth outpaced revenue growth,” said Tom
Marra, Symetra president and CEO.
“What the scoreboard doesn’t reflect is the tremendous amount of work
accomplished by the Symetra team in 2012 to build new products, distribution
and service capabilities. We’re seeing increased sales of our fixed indexed
annuity and group life and disability income products, though individual life
and variable annuity sales have been slower to develop,” Marra said. “With the
heavy construction work behind us, our focus now is to drive production in
these developing lines of business and start generating a return on our 2012
investments.”
Symetra’s board of directors recently authorized a stock repurchase program
for up to 10 million shares. Through the program, Marra said the company will
have greater flexibility to execute its capital management plans in 2013. More
details about the board’s action can be found in the “Stock Repurchase
Program” section of this earnings release.
BUSINESS SEGMENT RESULTS
Segment Pretax Adjusted Three Months Ended Twelve Months Ended
Operating Income (Loss)
(In millions) December 31 December 31
2012 2011* 2012 2011*
Benefits $ 12.4 $ 24.2 $ 70.5 $ 79.1
Deferred Annuities 29.1 27.5 102.7 95.8
Income Annuities 5.1 6.5 45.0 35.1
Individual Life 5.5 18.1 47.0 65.3
Other (5.3 ) (5.2 ) (26.1 ) (10.7 )
Pretax Adjusted Operating $ 46.8 $ 71.1 $ 239.1 $ 264.6
Income^1
Less: Income Taxes** (13.9 ) (20.0 ) (53.8 ) (74.4 )
Adjusted Operating Income $ 32.9 $ 51.1 $ 185.3 $ 190.2
* Historical financial information has been restated to reflect retrospective
adoption of a new accounting standard for deferred policy acquisition costs on
Jan. 1, 2012.
** Represents the total provision for income taxes adjusted for the tax effect
on net realized investment gains (losses) and on net gains (losses) on
Symetra’s fixed indexed annuity (FIA) products at the U.S. federal income tax
rate of 35%.
Benefits
*Pretax adjusted operating income was $12.4 million, compared with $24.2
million in fourth quarter 2011. For full-year 2012, pretax adjusted
operating income was $70.5 million, compared with $79.1 million in 2011.
Operating income decreased in fourth quarter and full-year 2012 due to a
less favorable loss ratio. Higher operating expenses, mainly related to
the expansion of Symetra’s group life and disability income insurance
business, also contributed to the earnings decline.
*Loss ratio was 67.7%, compared with a favorable 59.6% in fourth quarter
2011. For full-year 2012, the Benefits loss ratio was 65.1%, compared with
63.1% for 2011. The fourth quarter 2012 loss ratio reflected higher
medical stop-loss claims compared with the same quarter a year ago, and an
additional $3.8 million in claims and reserves related to the limited
benefit medical line. The full-year loss ratio of 65.1% was in line with
the company’s long-term target range of 63%–65%.
*Sales of $25.7 million were down slightly, compared with $26.5 million in
fourth quarter 2011. For full-year 2012, sales were $159.3 million, up
from $118.7 million in the prior year. Consistent pricing and strong
producer relationships led to an excellent year of medical stop-loss
sales. Group life and disability income sales also contributed to the
full-year improvement with sales of $15.6 million in 2012, up from $4.3
million in 2011.
Deferred Annuities
*Pretax adjusted operating income was $29.1 million, compared with $27.5
million in fourth quarter 2011. For the full year, pretax adjusted
operating income totaled $102.7 million, compared with $95.8 million in
2011. Earnings increased in both fourth quarter and full-year 2012
primarily due to higher fixed and fixed indexed annuity account values.
This improvement was mostly offset by higher operating expenses related to
Symetra True Variable Annuity^®. In fourth quarter 2012, investment
prepayment-related income, net of amortization, boosted earnings by $7.1
million, compared with a net increase of $6.3 million in fourth quarter
2011.
*Total account values were $11.8 billion at year-end, up 4% from $11.3
billion at the end of 2011.
*Sales were $300.8 million, compared with $356.8 million in fourth quarter
2011. For full-year 2012, sales were $1,146.6 million, down from $1,815.3
million in 2011. Deferred annuity sales, although up from third quarter
2012 sales of $166.5 million, continued to feel the effects of low
interest rates. Fixed indexed annuity (FIA) sales for fourth quarter 2012
were $115.8 million, up $90.0 million over the same quarter in 2011. For
the full year, FIA sales grew to $292.6 million, compared with $45.3
million in 2011 (Symetra Edge Pro^® fixed indexed annuity launched in
April 2011). True VA sales fell short of expectations in 2012.
Income Annuities
*Pretax adjusted operating income was $5.1 million, compared with $6.5
million in fourth quarter 2011. Fourth quarter 2012 results reflected
lower income from decreased funding services activity and a lower interest
spread driven by a $1.1 million reserve increase. The earnings decline was
partially offset by better mortality experience. For the full year, pretax
adjusted operating income was $45.0 million, up from $35.1 million in
2011. The increase was due primarily to favorable mortality experience and
higher fee revenue on sales of third-party structured settlements,
partially offset by lower income from reduced funding services activity.
*Mortality losses were $0.9 million in fourth quarter 2012, compared with
mortality losses of $3.9 million in fourth quarter 2011. On a full-year
basis, mortality gains were $12.9 million in 2012, compared with mortality
gains of $0.3 million in 2011.
*Sales were $57.6 million in fourth quarter 2012 and $258.2 million for the
full year. This compares with sales of $54.1 million in the same quarter
of 2011, and $221.9 million for full-year 2011. Sales were up due to the
effectiveness of shorter-duration single premium immediate annuity (SPIA)
sales strategies to help customers maximize retirement income. In December
2012, Symetra discontinued sales of structured settlement annuities;
however, the company will continue to service the existing block of
business.
Individual Life
*Pretax adjusted operating income was $5.5 million, compared with $18.1
million in fourth quarter 2011. For the full year, pretax adjusted
operating income was $47.0 million, compared with $65.3 million in 2011.
Fourth quarter 2012 operating income fell $3.8 million due to a decrease
in BOLI ROA stemming from higher BOLI claims and lower investment yields.
Individual life claims, which fluctuate from quarter to quarter, increased
$2.8 million over fourth quarter 2011, though mortality was in line with
expectations. Increased operating expenses of $3.2 million also
contributed to the fourth quarter earnings decline. For the year, lower
BOLI ROA, higher individual life claims and increased operating expenses
accounted for the overall decrease in earnings.
*Sales of individual life products were $1.3 million in fourth quarter
2012, down from $3.1 million in the same quarter a year ago. Full-year
2012 sales were $9.1 million, compared with $11.7 million in 2011. Fourth
quarter and full-year results reflected lower single premium life sales
due to product changes made in response to sustained low interest rates.
Sales of Symetra Classic Universal Life fell short of expectations in
2012. For the full year, BOLI sales were $2.0 million in 2012, compared
with no sales in 2011.
Other
*Pretax adjusted operating loss was $5.3 million, compared with a loss of
$5.2 million in the same quarter a year ago. The Other segment includes
unallocated corporate income and expenses, interest expense on debt and
other income outside of Symetra’s four business segments. Fourth quarter
2012 results included expenses related to the company’s exploration of an
acquisition opportunity that did not come to fruition. For full-year 2012,
the Other segment had a pretax adjusted operating loss of $26.1 million,
compared with a loss of $10.7 million in 2011. Full-year results included
an $11.6 million decrease in net investment income, primarily due to tax
credit investments, which lowered Symetra’s income tax expense in 2012
compared with 2011.
Investment Portfolio
*Symetra’s equity portfolio is marked to market and consists of the
company’s common stock and other equity-like investments. This portfolio
posted net investment gains of $3.1 million, compared with net gains of
$38.5 million in fourth quarter 2011, reflecting lower equity market
growth. For the full year, net realized investment gains on the equity
portfolio were $36.7 million, compared with net losses of $9.1 million in
2011.
The company’s common stock portfolio, which is included in Symetra’s overall
net realized investment results, delivered a total return of -0.4% in fourth
quarter 2012, in line with the S&P 500 Total Return Index result of -0.4%. For
the full year, the company’s common stock portfolio generated a total return
of 7.9%, underperforming the S&P 500 Total Return Index result of 16.0%.
*Net realized investment losses were $3.9 million, compared with net gains
of $34.1 million in fourth quarter 2011, driven by smaller gains in the
equity portfolio. For full-year 2012, net realized investment gains were
$31.1 million, compared with net gains of $7.2 million in 2011.
Significantly improved equity returns for the year were slightly offset by
higher impairments of $29.0 million, compared with impairments of $14.1
million in 2011.
Stockholders’ Equity
*Total stockholders’ equity, or book value, as of Dec. 31, 2012, was
$3,630.1 million, or $26.29 per share, compared with $3,641.2 million, or
$26.37 per share, as of Sept. 30, 2012.
*Adjusted book value as converted,^1 as of Dec. 31, 2012, was $2,477.0
million, or $17.94 per share, up from $2,455.0 million, or $17.78 per
share, as of Sept. 30, 2012.
*Risk-based capital (RBC) ratio for Symetra Life Insurance Company at the
end of 2012 was 486%. Statutory capital and surplus, including asset
valuation reserve (AVR), was $2,173.9 million. A $25 million pretax
statutory reserve was established to address the risk related to low
interest rates, mainly in Symetra’s structured settlement and immediate
annuity blocks of business.
*Provision for income taxes in the fourth quarter 2012 was $12.9 million,
compared with $32.2 million in fourth quarter 2011. The decrease reflects
lower pretax income from fluctuations in net realized investment returns,
offset by a $4.7 million deferred tax asset adjustment. Symetra’s
effective tax rate for fourth quarter 2012 was 29.4%, compared with 30.4%
for the same period in 2011. Symetra’s effective tax rate in 2012 was
24.0%, compared with 28.3% in 2011, reflecting increased benefits from tax
credit investments.
2013 Earnings Outlook
Symetra expects to generate adjusted operating income per diluted share of
$1.30–$1.50 in 2013. Among the factors that could drive actual results toward
the upper end, middle or lower end of the guidance range are:
*changes in the interest rate environment;
*Benefits Division loss ratio relative to long-term target;
*maintaining current distribution relationships and success with new
distribution partners;
*timing and levels of life and annuity sales;
*amount of issuance and yields on commercial mortgage loans;
*increases or decreases in the amount of prepayments in the investment
portfolio;
*returns on alternative investment portfolio;
*mortality experience;
*managing operating expense levels;
*timing and amount of common stock buybacks;
*changes in expenses related to legal proceedings or regulatory
investigations; and
*achievement of target cash balances.
Stock Repurchase Program
On Feb. 1, 2013, Symetra’s board of directors authorized the repurchase of up
to 10 million shares of the company’s outstanding common stock. Symetra’s 2013
earnings outlook reflects the return of capital to shareholders through
dividends and stock repurchases.
Under the stock repurchase program, purchases may be made from time to time in
the open market, in accelerated stock buyback arrangements, in privately
negotiated transactions or otherwise. The timing and amount of any stock
repurchases will be based on market conditions and other considerations. The
program may be modified, extended or terminated by the board of directors at
any time.
Additional Financial Information
This press release, the fourth quarter 2012 financial supplement and financial
review slides are posted on the company's website at
http://investors.symetra.com. Investors are encouraged to review all of these
materials.
Management to Review Results on Conference Call and Webcast
Symetra’s senior management team will discuss the company’s fourth quarter and
full-year 2012 performance and 2013 outlook with investors and analysts on
Tuesday, Feb. 5, 2013 at 10 a.m., Eastern Time (7 a.m., Pacific Time). To
listen by phone, dial 1-888-679-8033. For international callers, dial
617-213-4846. The passcode is 40490671. Participants may pre-register for the
call at www.symetra.com/earnings. Pre-registrants will be issued a PIN to use
when dialing into the live call, which will provide quick access to the
conference by bypassing the operator.
To listen to a live webcast of the conference call, go to
http://investors.symetra.com. Listeners should go to the website at least 15
minutes before the call and test the compatibility of their computer. Links
will be available to download any necessary audio software.
A replay of the call can be accessed by phone at approximately 1 p.m., Eastern
Time (10 a.m., Pacific Time) on Feb. 5, 2013 by dialing 1-888-286-8010. For
international callers, dial 617-801-6888. The passcode is 33271695. The replay
will be available by phone until Feb. 12, 2013. To access a replay of the
conference call over the Internet, visit http://investors.symetra.com.
Use of Non-GAAP Measures
^1 Symetra uses both U.S. generally accepted accounting principles (GAAP) and
non-GAAP financial measures to track the performance of its operations and
financial condition. Definitions of each non-GAAP measure are provided below,
and reconciliations to the most directly comparable GAAP measures are included
in the tables at the end of this press release and in the quarterly financial
supplement. These measures are not substitutes for GAAP financial measures.
For more information about these non-GAAP measures, please see Symetra’s 2011
Annual Report on Form 10-K.
This press release references the following non-GAAP financial measures:
*Adjusted operating income is defined by the company as net income,
excluding after-tax net investment gains (losses) and including after-tax
net realized gains (losses) related to Symetra’s fixed indexed annuity
(FIA) products.
*Adjusted operating income per diluted share is defined as adjusted
operating income divided by diluted common shares outstanding.
*Pretax adjusted operating income is defined as adjusted operating income
on a pretax basis. It also represents the cumulative total of segment
pretax adjusted operating income, which at the segment level is a GAAP
measure.
*Adjusted book value is defined as stockholders’ equity, less accumulated
other comprehensive income (loss), or AOCI.
*Adjusted book value, as converted, is defined as stockholders’ equity,
less AOCI plus the assumed proceeds from exercising the outstanding
warrants.
*Adjusted book value per share, as converted, is calculated as adjusted
book value, as converted, divided by the sum of outstanding common shares
and shares subject to outstanding warrants.
*Operating return on average equity is defined as adjusted operating income
for the most recent four quarters, divided by average ending adjusted book
value for the most recent five quarters.
About Symetra
Symetra Financial Corporation (NYSE:SYA) is a diversified financial services
company based in Bellevue, Wash. In business since 1957, Symetra provides
employee benefits, annuities and life insurance through a national network of
benefit consultants, financial institutions, and independent agents and
advisors. For more information, visit www.symetra.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995
This press release may contain “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of current or
historical facts included or referenced in this release that address
activities, events or developments that we expect or anticipate will or may
occur in the future, are forward-looking statements. The words “will,”
“believe,” “intend,” “plan,” “expect,” “anticipate,” “project,” “estimate,”
“predict,” “potential” and similar expressions also are intended to identify
forward-looking statements. These forward-looking statements include, among
others, statements with respect to Symetra's:
*estimates or projections of revenues, net income (loss), net income (loss)
per share, adjusted operating income (loss), adjusted operating income
(loss) per share, market share or other financial forecasts;
*trends in operations, financial performance and financial condition;
*financial and operating targets or plans;
*business and growth strategy, including prospective products, services and
distribution partners; and
*stock repurchase program.
These statements are based on certain assumptions and analyses made by Symetra
in light of its experience and perception of historical trends, current
conditions and expected future developments, as well as other factors believed
to be appropriate under the circumstances. Whether actual results and
developments will conform to Symetra's expectations and predictions is subject
to a number of risks, uncertainties and contingencies that could cause actual
results to differ materially from expectations, including, among others:
*the effects of fluctuations in interest rates and a prolonged low interest
rate environment;
*general economic, market or business conditions, including further
economic downturns or other adverse conditions in the global and domestic
capital and credit markets;
*the effects of changes in monetary and fiscal policy;
*the effects of changes in government programs to stimulate mortgage
refinancing and significant increases in corporate refinance activity;
*the performance of Symetra’s investment portfolio;
*the continued availability of quality commercial mortgage loan investments
and Symetra’s continued capacity to invest in commercial mortgage loans;
*Symetra’s ability to successfully execute on its strategies;
*recorded reserves for future policy benefits and claims subsequently
proving to be inadequate or inaccurate;
*deviations from assumptions used in setting prices for insurance and
annuity products or establishing cash-flow testing reserves;
*continued viability of certain products under various economic, regulatory
and other conditions;
*market pricing and competitive trends related to insurance products and
services;
*changes in amortization of deferred policy acquisition costs and deferred
sales inducements;
*financial strength or credit ratings changes;
*the availability and cost of capital and financing;
*the continued availability and cost of reinsurance coverage;
*changes in laws or regulations, or their interpretation, including those
that could increase Symetra's business costs, reserve levels and required
capital levels;
*the ability of subsidiaries to pay dividends to Symetra;
*the effects of implementation of the Patient Protection and Affordable
Care Act;
*our ability to implement effective and sufficient risk management policies
and procedures, including hedging strategies;
*the initiation of legal or regulatory investigations against us and the
results of any legal or regulatory proceedings;
*the effects of implementation of the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010; and
*the risks that are described from time to time in Symetra's filings with
the U.S. Securities and Exchange Commission, including those in Symetra's
2011 Annual Report on Form 10-K and 2012 quarterly reports on Form 10-Q.
Consequently, all of the forward-looking statements made in this press release
are qualified by these cautionary statements, and there can be no assurance
that the actual results or developments anticipated by Symetra will be
realized or, even if substantially realized, that they will have the expected
consequences to, or effects on, Symetra or its business or operations. Symetra
assumes no obligation to update publicly any such forward-looking statements,
whether as a result of new information, future events or otherwise.
Symetra Financial Corporation
Consolidated Income Statement Data
(in millions, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2012 2011 2012 2011
Revenues As As
Adjusted* Adjusted*
Premiums $ 153.8 $ 149.7 $ 605.0 $ 540.5
Net investment income 323.2 333.2 1,275.2 1,270.9
Policy fees, contract 47.7 44.6 189.9 180.7
charges and other
Net realized
investment gains
(losses):
Total
other-than-temporary (6.4 ) (4.2 ) (37.1 ) (13.2 )
impairment losses on
securities
Less: portion
recognized in other 2.6 (1.3 ) 8.1 (0.9 )
comprehensive income
Net impairment losses
recognized in (3.8 ) (5.5 ) (29.0 ) (14.1 )
earnings
Other net realized
investment gains (0.1 ) 39.6 60.1 21.3
(losses)
Total net realized
investment gains (3.9 ) 34.1 31.1 7.2
(losses)
Total revenues 520.8 561.6 2,101.2 1,999.3
Benefits and expenses
Policyholder benefits 118.2 96.0 439.0 381.4
and claims
Interest credited 237.6 243.2 932.8 925.9
Other underwriting
and operating 96.0 87.3 360.5 317.9
expenses
Interest expense 8.2 8.1 32.8 32.1
Amortization of
deferred policy 16.9 21.1 66.0 68.8
acquisition costs
Total benefits and 476.9 455.7 1,831.1 1,726.1
expenses
Income from
operations before 43.9 105.9 270.1 273.2
income taxes
Provision (benefit)
for income taxes
Total provision for 12.9 32.2 64.7 77.4
income taxes
Net income $ 31.0 $ 73.7 $ 205.4 $ 195.8
Net income per common
share
Basic $ 0.22 $ 0.54 $ 1.49 $ 1.42
Diluted $ 0.22 $ 0.54 $ 1.49 $ 1.42
Weighted-average
number of common
shares outstanding
Basic 138.114 137.585 138.018 137.491
Diluted 138.122 137.595 138.024 137.503
Cash dividends
declared per common $ 0.07 $ 0.06 $ 0.28 $ 0.23
share
Non-GAAP financial
measures
Adjusted operating $ 32.9 $ 51.1 $ 185.3 $ 190.2
income
Reconciliation to net
income
Net income $ 31.0 $ 73.7 $ 205.4 $ 195.8
Less: Net realized
investment gains (2.6 ) 22.2 20.2 4.7
(losses) (net of
taxes)**
Add: Net realized
gains (losses) - FIA (0.7 ) (0.4 ) 0.1 (0.9 )
(net of taxes)***
Adjusted operating $ 32.9 $ 51.1 $ 185.3 $ 190.2
income
*Historical financial information has been restated to reflect retrospective
adoption of a new accounting standard for deferred acquisition costs on
January 1, 2012.
**Net realized investment gains (losses) are reported net of taxes of $(1.3),
$11.9, $10.9, and $2.5 for the three and twelve months ended December 31, 2012
and 2011, respectively.
***Net realized gains (losses) - FIA are reported net of taxes of $(0.3),
$(0.3), $0.0 and $(0.5) for the three and twelve months ended December 31,
2012 and 2011, respectively.
Symetra Financial Corporation
Consolidated Balance Sheet Data
(in millions, except per share data)
(unaudited)
December 31 December 31
2012 2011
Assets As Adjusted*
Total investments $ 27,556.4 $ 26,171.7
Other assets 1,096.8 1,215.8
Separate account assets 807.7 795.8
Total assets $ 29,460.9 $ 28,183.3
Liabilities and stockholders'
equity
Policyholder liabilities $ 23,735.2 $ 23,140.6
Notes payable 449.4 449.2
Other liabilities 838.5 682.8
Separate account liabilities 807.7 795.8
Total liabilities 25,830.8 25,068.4
Common stock and additional 1,460.5 1,455.8
paid-in capital
Retained earnings 798.4 631.8
Accumulated other comprehensive 1,371.2 1,027.3
income, net of taxes
Total stockholders' equity 3,630.1 3,114.9
Total liabilities and $ 29,460.9 $ 28,183.3
stockholders' equity
Book value per share** $ 26.29 $ 22.64
Non-GAAP financial measures
Adjusted book value $ 2,258.9 $ 2,087.6
Reconciliation to
stockholders' equity
Total stockholders' equity $ 3,630.1 $ 3,114.9
Less: AOCI 1,371.2 1,027.3
Adjusted book value 2,258.9 2,087.6
Add: Assumed proceeds from exercise 218.1 218.1
of warrants
Adjusted book value, as $ 2,477.0 $ 2,305.7
converted
Adjusted book value per share, $ 17.94 $ 16.75
as converted***
*Historical financial information has been restated to reflect retrospective
adoption of a new accounting standard for deferred acquisition costs on
January 1, 2012.
**Book value per share is calculated based on stockholders' equity divided by
outstanding common shares plus shares subject to outstanding warrants,
totaling 138.064 and 137.613 as of December 31, 2012 and December 31, 2011,
respectively.
***Adjusted book value per share, as converted, is calculated based on
adjusted book value, as converted, divided by outstanding common shares plus
shares subject to outstanding warrants, totaling 138.064 and 137.613 as of
December 31, 2012 and December 31, 2011, respectively.
Symetra Financial Corporation
Reconciliation of Segment Pretax Adjusted Operating Income, Operating Revenues
and Operating ROAE
(in millions)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2012 2011 2012 2011
Segment pretax
adjusted As Adjusted* As
operating income Adjusted*
(loss)
Benefits $ 12.4 $ 24.2 $ 70.5 $ 79.1
Deferred 29.1 27.5 102.7 95.8
Annuities
Income Annuities 5.1 6.5 45.0 35.1
Individual Life 5.5 18.1 47.0 65.3
Other (5.3 ) (5.2 ) (26.1 ) (10.7 )
Subtotal 46.8 71.1 239.1 264.6
Add: Net
realized (3.9 ) 34.1 31.1 7.2
investment gains
(losses)
Less: Net
realized gains (1.0 ) (0.7 ) 0.1 (1.4 )
(losses) - FIA
Income from
operations $ 43.9 $ 105.9 $ 270.1 $ 273.2
before income
taxes
Reconciliation of
revenues to
operating
revenues
Revenues $ 520.8 $ 561.6 $ 2,101.2 $ 1,999.3
Less: Net
realized (3.9 ) 34.1 31.1 7.2
investment gains
(losses)
Add: Net
realized gains (1.0 ) (0.7 ) 0.1 (1.4 )
(losses) - FIA
Operating $ 523.7 $ 526.8 $ 2,070.2 $ 1,990.7
revenues
Twelve Months Ended
December 31
2012 2011
As Adjusted*
ROE 6.1% 7.2%
Average
stockholders' $ 3,383.9 $ 2,710.2
equity**
Non-GAAP
financial
measures
Operating ROAE 8.5% 9.5%
Average adjusted $ 2,185.7 $ 2,002.4
book value***
*Historical financial information has been restated to reflect retrospective
adoption of a new accounting standard for deferred acquisition costs on
January 1, 2012.
**Average stockholders' equity is derived by averaging ending stockholders'
equity for the most recent five quarters.
***Average adjusted book value is derived by averaging ending adjusted book
value for the most recent five quarters.
Contact:
Symetra Financial Corporation
Investor Relations Contact:
Jim Pirak, 425-256-8284
jim.pirak@symetra.com
or
Media Relations Contact:
Diana McSweeney, 425-256-6167
diana.mcsweeney@symetra.com